Nvidia GPUs used in China's AI models despite export ban

Nvidia's powerful GPUs have been secretly used in China's most advanced AI models, according to a new research effort that raises serious questions about export control violations.

The study analyzed the weights of large language models developed by Chinese companies and found evidence that they were trained on Nvidia chips banned from export to China. This has significant implications for the leading chip designer, which is already facing scrutiny over its CEO's personal relationships with employees and customers. The Nvidia GPUs used in these AI models are far more powerful than those allowed under current U.S. export controls.

Jensen Huang, Nvidia's outgoing CEO, has a history of seeking to expand the company's presence in China, despite the country's restrictions on sensitive technology exports. His departure from the company may be related to its potential liability for export control violations, rather than just his personal scandals.

U.S. export regulations aim to prevent China from gaining an unfair advantage in AI capabilities, but Nvidia has continued to find ways to ship its most advanced GPUs to Chinese companies. The Trump administration had introduced a circuitous shipping route that allowed Nvidia to export the H200 chip with a 25% tariff, while keeping the more powerful Blackwell GPU out of reach.

The research effort found that several prominent AI models developed by Chinese companies bear "fingerprints from training on Blackwell GPUs, despite being publicly released as having been trained using less powerful chips. This suggests widespread access to these restricted Nvidia GPUs among Chinese frontier labs and highlights the challenge facing U.S. policymakers in enforcing export controls.

The study's findings have significant implications for the global AI landscape and raise questions about the effectiveness of current regulations governing sensitive technology exports. The research effort is led by Will DePue, a former OpenAI researcher who now heads the nonprofit Unemployment Labs, which has been analyzing the weights of large language models released openly by various companies.

A loophole in export control laws has allowed millions of advanced chips to enter China through indirect means.

These chips, which are subject to U.S. export bans, have been used by Chinese AI labs to train powerful models that rival those developed in the United States. According to estimates from Epoch AI, a nonprofit research organization, approximately two million such chips entered China between 2024 and 2025, often via routes designed to conceal their ultimate destination.

Some of these chips were likely deployed in offshore data centers, a common practice among Chinese firms seeking access to high-performance computing capabilities without violating export control laws. In fact, Epoch's data suggests that Malaysia has become a hub for such facilities, with approximately 275,000 Nvidia AI accelerators imported to the country between 2024 and 2025.

The goal of export bans is to prevent powerful chips from falling into the hands of Chinese AI labs, but critics argue that this approach is flawed. By focusing on who owns or installs the chips rather than where they are used, these regulations create loopholes that can be exploited by companies seeking to circumvent them.

As researcher Sam Bresnick notes, this situation raises questions about the effectiveness of export control laws in maintaining a U.S. tech edge. If we care about preserving our technological advantage," Bresnick says, it doesn't make sense to allow Chinese companies to access chips in Malaysia while prohibiting their use in mainland China or Hong Kong.

Megaspeed's subsidiary Speedmatrix has been at the forefront of a complex trade involving Nvidia chips, which have been banned from export to China. The company's leadership under Alice Huang has been scrutinized by both US and Singaporean authorities in investigations that have been ongoing for several years.

A recent report by Bloomberg shed light on another aspect of this trade: a company linked to Alice Huang was involved in smuggling Nvidia chips into Shanghai, despite the ban. This revelation raises questions about the extent to which Megaspeed's operations are tied to Chinese firms barred from accessing US-made chips.

The Culper report highlighted the significant role that China plays in driving demand for Nvidia's products, with a substantial share of the company's revenue coming from Chinese buyers either through remote data centers or illicit means. This has led some to label Nvidia as having a "China problem" due to its reliance on this market.

The implications of China's domestic chip industry ambitions are significant: if successful, they could lead to a drying up of billions of dollars in demand for Nvidia chips from Chinese companies. Currently, over 600,000 H200 chips are stockpiled in Hong Kong, awaiting shipment into China, but so far, no consensus has emerged on why these shipments have not been cleared for import.

The hold-up in clearing Nvidia's H200 chips for import into China has sparked various theories about the government's motivations.

Some experts believe that holding back these high-performance chips may not drive domestic production, given the massive demand for them in the AI sector. The sheer volume of required chips makes it unlikely that domestic manufacturers could meet demand without access to international suppliers.

The potential for a trade deal involving large volumes of U.S. goods has also been cited as a possible reason for the delay. If such an agreement were to materialize, China might be preparing to import significant quantities of U.S. products, including AI chips.

However, concerns about surveillance technology in these high-end chips have also been raised. The lack of transparency surrounding the use and tracking of controlled goods like AI chips creates uncertainty about the true intentions behind this hold-up.

The personal connections between Nvidia's leadership and certain Chinese entities are another factor that could complicate matters for the company if government investigators uncover any evidence of chip smuggling or negligence.

Nvidia's leadership personal connections with certain Chinese entities are a potential concern for the company if government investigators discover any evidence of chip smuggling or negligence.

The investigation into Nvidia's export-banned chips raises questions about the company's compliance with regulations and its relationships with key stakeholders in China. The complex web of connections between Nvidia's executives and influential figures in China could become a major issue if allegations of wrongdoing are proven, leading to severe consequences for the company.